The reality of managing social media risk in business

The benefits of using social media personally and professionally are profound. Through social media, businesses have grown and individuals have found new friendships and support when needed. Social media can be a blessing, but also a curse if you are not careful with how you use it. Just like anything in life, there are rewards as well as risks. And, when it comes to social media, recognizing the risks is the first step in managing them.

Social media platforms like Facebook, Twitter and LinkedIn have become integral parts of doing business these days. Whether your business uses these platforms to reach potential or existing customers, or simply maintains a social media presence, social media can trigger many risks within your organization. Companies can create strong social media programs with rules on what employees can say and do on and off the job, rigorous enforcement of policies and periodic reviews to stay up to date with new technologies or new social media channels, but that doesn’t always save them from a social media disaster.

In fact, a recent survey examining corporate social media risks and rewards from advisory firm Grant Thornton found that 71 percent of the executives polled said their company was concerned about possible risks posed by social media, but only 36 percent reported having social media training. The survey showed the social media risks that cause the most concern fall into four categories: damage to brand reputation, disclosure of proprietary and/or confidential information, corporate identity theft, and legal/regulatory and compliance violations.

According to The Federal Financial Institutions Examination Council (FFIEC )’s supervisory guidance entitled, "Social Media: Consumer Compliance Risk Management Guidance,” while a company can implement every best practice for how to set up and monitor its social media program, it remains susceptible to reputational damage because people outside the company’s sphere of influence—consumers and fraudsters—can still wreak havoc on the organization with negative comments about the company or its products.

For instance, a request by the New York City Police Department has reportedly backfired. Its request that Twitter users share pictures of themselves posing with police officers has caused people to start sending in photos of police brutality. The NYPD sent a tweet on Tuesday, saying it might feature the photographs on its Facebook page. The responses turned ugly when Occupy Wall Street tweeted a photograph of cops battling protesters with the caption "Changing hearts and minds one baton at a time." Other photos included an elderly man bloodied after being arrested for jaywalking. There were some respondents who sent in the type of police-friendly photographs officials were hoping for.

NYPD spokeswoman Kim Royster told The New York Times the department was "creating new ways to communicate effectively with the community" and that Twitter provided “an open forum for an uncensored exchange” that is “good for our city."

A law enforcement source told The New York Post the department didn’t think it through. “Good intentions by the NYPD, but who uses Twitter?” the source said. “The younger generation who have had bad interactions with the Police Department.”

Most social media issues arise from lack of due diligence, lack of oversight and lack of control, which can lead to harm to consumers, legal risks, operational risks and reputational risks that can change the trust relationship you have with the market. So be aware about the big risks social media can cause your business and have a plan of action when you are faced with a social media crisis.

Take this advice: Realize that anything you do can leak out, do not over promote, do not over post, keep the negativity at bay, do not post sexual, religious, political and graphic material, never fight with anyone on social media, take legal action in private if necessary.